Quality is a never ending journey

After the Industrial Revolution we now have the Technology Revolution. Technology is changing the way we live, the way we work and the nature of work life itself. As science continues to advance we will increasingly see technology being integrated as a natural part of our day-to-day existence. All this will mean information that is readily accessible at reduced costs to all those who want it. For architects it could d designing , for environmentalists this could be a means of increasing awareness and perhaps, avoiding disasters throughout the world, authors may have a wider canvas to sketch on, for stock market traders this could mean better decision while dealing in many markets for manufacturing giants this could aid in inventory and distribution management, and for financial markets this would mean catering to the smallest financial needs of customers in increasingly competitively condition. Banking and the Service Sector The Service Sector contributes a major portion of the Gross Domestic Product of developed countries. In developing nations, too, the contribution of the service sector ( which comprise services relating to transport, communications, trade, banking , insurance, other financial services, medical and hospital services, public administration and defence and miscellaneous services) has been growing rapidly. The Service Sector now contributes over 40% of Indias GDP. In the service sector, the banking segment has been amongst the fastest growing segment as can be seen from the following tables. Service Banking and Insurance Transport (other than Rail) Communication Hotels and Restaurants Real Estate and Business Services Railways Services Annual Rate of Growth* 7.9% 6.8% 6.5% 5.1% 4.4% 3.4% 4.9%

*For the period 1950-1995 Source :CMIE The share of Banking and Insurance has increased to over 6.3% of Indias GDP (at constant prices ) from about 2% (at constant prices) in the early seventies, and as Indias markets continue to develop and integrate with world markets, this share is likely to increase further. The Banking Sector In India Banking services worldwide can broadly classified into into investment banking and commercial banking is primarily concerned with helping corporate bodies raise funds at the best possible rates from various markets. Commercial banking is concerned with channeling savings to productive uses. Banking in an intermediary function but one that is very essential for sustained economic growth. In India, since the nationalization of banks in 1969, banking has been primarily in the Central Governments domain. As part of the Governments liberalization policy which began in 1991, New Private Sector Banks (NPSBs) were allowed to be set up. Today, India has nine NPSBs that provide commercial banking services. In a relatively short period, the NPSBs have managed to achieve about 2% of the market share in terms of business, a disproportionate of 2% share of the total income and almost 17% of the total net profit earned by the banking system as a whole. These success can be attributed in large measure to the superior Quality of Services that these banks have been able to provide.

What is Quality? Quality has been defined in various ways by quality gurus like Juran, Deming, Crosby and Taguchi, among others Josheph Juran has defined quality as fitness for use. Deming believes quality has to satisfy the needs of customer , both present and future. Crosby holds that conformance to requirements is quality. The essence of these definitions is the same . As applicable to Banking , Quality may be defined as the ability to satisfy the customers requirements and needs to the fullest and t be able to replicate this on an on-going basis. The Quality Key Quality is especially important in the banking sector because duplication of products and services is relatively easy. Further, differentiation o products is difficult of hazy. Thus, quality becomes the only differentiator an the key to continuing success. With increasing competition, banks that survive and succeed will be the one that provide quality service. Research studies have repeatedly proved that customers are willing to pay for quality service. Research studies have repeatedly proved that customers are willing to pay for quality. Banks that wish to suceed and stay ahead must, therefore, systematically build a structure that aims at providing Total Quality Service. As with the banks financial goals, success can be achieved only with proper analysis and suitable goals. The Quality Key and Top Management The top management of the bank is the custodian of the Quality Key. They have the responsibility to ensure that the key is properly used and is made to work for their bank. This can only happen if top management believes in and is committed to developing a Quality Services Bank. Quality is a primary responsible of to management and quality measures can only succeed with top managements commitment. Without commitment from top management , quality will remain a peripheral and possibly non-productive activity. Hence, it may be emphasized that, for any quality culture to exist and quality consciousness to develop, top management support and commitment are absolutely essintial. Once the top management is convinced that quality is essential for the success and continued growth of the organisation, it can begin to help the bank develop suitable quality programmes. Commitment must be backed by planned action, all employees must be trained to develop quality consciousness and the organisation must continually strive to improve the quality of services provided. Senior management should clearly communicate its commitment and detailed implementation plans to all employees. A core cross-functional group may be formed that would help top management implement the Quality Action Plan. Middle and junior level employees will only be committed to quality programmes if they believe that it is important and to ensure this communication should be regularly maintained through meetings internal newsletters, formal feedback, etc. Often, it is observed that a particular department or person is made responsible for quality. This can be self-defeating. Merely appointing a Quality Manager and organizing a few random quality programmes can lead to little or no improvement. In fact, apoorly implemnted quality programme can result in loss of faith in the utility of such measures and employees may begin to regard this as just another chore or managements latest fad which will soon pass. Top management must explain and communicate to all levels of employees that quality is not a one-time job and is not about fixing problems, as, say, an irate bank customer who has been waiting to be attended to. The management must communicate that these problems arise because of the absence of the absence of quality consciousness and will continue to arise if quality is not ingrained as an accepted business norm. Quality is, as jthe Quality gurus say, a journey. A journey that continues as the bank achieves higher and higher levels of success. Once top management can successfully communicate this to all employees and ensure their commitment, the bank can

successfully implement and reap the benefits of achieving high service quality. Quality Training Programmes Once the bank has decided on achieving high service quality , Suitable trainign programmes should be introduced and all members of staff should get an opportunity to participate in these programmes. Such programmes should preferably be tailor-made to suit the banks needs and should be jprferably administerd by experts. The success ;of these progrmmes connot be immediately gauged completely, but the progress on various quality parameters should be regularly parameters should be regularly monitored, perhaps by an internal coordinator. Measuring for improvement Once the quality development programme is implemented, it is vital that its success be known with a view to improving quality on a continuous basis. Measurement facilitates improvement and to know what to improve upon, one must know what to measure. Measuring Service Quality Measuring Quality in the Services Sector and in particular in the Banking sector, is more difficult than measuring the quality of manufactured goods. This is mainly due to the following: y The Services Sector as a whole is very heterogeneous and what is very heterogeneous and what may hold true for one service may not hold true for another service sector. For example, the nature of banking services is very different from, say ,the nature of services provided by an airline or a hotel. Even within banking there are a variety of dissimilar services like retail banking, commercial banking, investment banking etc. This heterogeneity makes standardized service quality measurement very difficult. Most manufacturing companies, on the other hand, have been able to adopt standard measures to improve the quality of goods produced. Services are intangible in nature and, unlike in the case of goods, there is no real product that the customer takes home. This is true of banking services and most other financial services where the service offered is only what the customer experiences fleetingly. Some service sectors like the hotel industry, the tourism indistry,etc. provide services that may be considered somewhat more tangible. There is no scope for inspection before the service delivered. All services have a here-and-now attribute that makes standardised quality testing and control procedures followed by manufacturing sector difficult to adopt. Unlike a good manufacturer, a bank cannot inspect its services and products to weed out unsatisfactory ones before they are presented to the customer Unlike in the case of manufacturing companies where the goods are manufactured and then sold to customers, in the services sector, the customer is a part and parcel of the process that provides the service. The service is created with the involvement of the customer , if there is no customer there can be no service. In this sense, the customers is inseparable from the service. This is especially true of banking services, both retail and corporate. Customers are central to the banking service that is sought to be provided.

I believe that all improvement at a bank must have the customers as the focal point and as such Customer Satisfaction is a good determinant of the Quality of Services provided by abank. A customer could be an external customer such as an account holder at the bank, or an internal customer such as a colleague from another department who requests information. It is important to understand that both internal and external customers are important for long term quality development and improvement. Banking Services: Technical Quality and Functional Quality

Service Quality can be thought of as having two dimension: Technical quality and Functional quality . Technical Quality refers to what the bank gives the customer . Functional Quality refers to How the banks services are provided to the customer. Technical Quality To ensure that it delivers technical quality , the bank must ensure that y y y y Its products and services are closely aligned with customer needs. Customers are adequately informed about the banks products and services The banks staff, especially front-line staff , have thorough knowledge of the banks products and services The banks branch has a suitable mix of people with experience in banking, finance, accounting and legal aspects, s9o a s to ensure that the branch is adequately equipped to deliver technical quality The banks staff has been adequately communicate with customer queries The banks staff is able to effectively communicate with customers staff should also be able to converse in the local language, if required. The banks staff is able to provide professional advice to its customers The banks staff , especially front line staff , has been adequately trained to deal with difficult customers and with customer complaints. Handling of customer grievances is the overall responsibility of a senior official who is nor directly involved with the routine branch banking operations.

y y y y y

Functional Quality Functional quality is concerned with how the service is provided to the banks customer . A few elements that affect a banking services functional quality include: y y y y y y Attitude of the banks staff members Importance given to the banks customers over routine work. Perceived credibility of the banks officials to customer queries Ambience at the bank Ability to hold discussions with senior officials with a suitable degree of proavacy Image of the bank as a whole

A bank must be equipped to deliver both Technical and Functional quality thus ensuring that it provides its customers with total quality service. Relevant qualitative determinants could be set up for a few technical and functional quality parameters, but most of these remain difficult to quantify . A bank could set up appropriate policies and procedures, for example recruitment policies, to create enabling conditions for providing technical and functional quality to its customers . The ultimate focus should firmly be on providing quick and cost-effective quality banking services. Ensuring Customer Satisfaction How does the bank ensure the customers satisfaction? It does so by: y y y y Determining what satisfies the customer Devising suitable quantitative determinants Continually measuring and improving these parameters Seeking customer feedback from time to time to ensure alignment with customer needs

This 4 steps approach can go a long way in helping the bank achieve its Quality goals. We look at each of these steps in a little grater details.

Determining what satisfies the customer This is the most crucial and , perhaps, the ,most difficult part of the exercise. The best way to determine what satisfies the customer is to ask the customer. Several organisations regularly send out questionnaires and direct mailers to their customers ( both internal and external ), analyze the feedback received and initiate appropriate action. Varying Customer Perceptions of Banking Service Quality Customer, who are central to the banking service, are not a homogeneous class. They come from varying socio-economic and cultural backgrounds. The perception of the Quality of Banking Services provided will differ from customer to customer and even for the same customer at different points of time, depending on the mood and mind-set of the same user at a particular point of time. A customer who needs money and comes to an ATM on a Sunday to find that it is not working is likely to be much more dissatisfied than if she or he were to find the same ATM temporarily out of order on a day when they happen to have popped in to the ATM on their way to work. Some other factors that may influence perceptions of banking service quality are: y y y y y y Overall ambience at the bank Past experiences with the bank Familiarity with the services offered by the bank, the procedures followed etc. Knowledge of or experience with competitors products and services Banking with a particular bank which may be regarded as a status symbol Interaction with and/ or opinions of other customers rights etc.

These factors make the measurement of banking service quality difficult and subjective. Devising Quantitative Determinants Based on various feedback results and on the Banks internal research a bank may devise suitable quantitative measures that can be tracked regularly. After the system of tracking has stabilized , suitable standards can be set. Interface with customers results in several moments of truth that must be handled every day, bank must ensure that these result in total customer satisfaction. For example a banks Customer Service Standards may stipulate that all incoming phone calls be answered within three rings, all queries be attended to within five minutes, no call be transferred more than twice, all messages be recorded and communicated to the concerned person/department within thirty minutes, etc. Today , it is estimated that there are over 1500 banking websites, with the growing importance of the internert, banks will have to formulate standards for internet interface also. These could be , for example all queries to be answered on e-mail within 12 hours and to be followed up with written communication within 24 hours, etc. Where there is direct interface with the banks employees, it must be ensured that all customers go back with a sense of satisfaction . Many banks have set standards- for example , not more than three people should be waiting in a queue at any counter, all in a queues should be deposed off in 3 minutes, all deposits should be accepted and receipt issued in 10 minutes, etc. A bank should attempt t formulate Quantitative Determinants to enable objective measurement of various parameters. A few quantitative determinants that could be used by a bank included. Retail Banking Quantitative determinates could be ,for example ,time taken to y y y Accept a cash deposit Accept a cheque deposit Complete a cash withdrawal

y y y y y y y y y y y y

Complete a cheque withdrawal Act of an account opening request Open an account (provided everything is in order) Issue a draft Issue a cheque book Issue an ATM card Issue an account statement Give a locker Update a passbook Clear an outstation cheque Answer routine customer queries account balance, cheque clearing status interest rates etc. Answer other customer queries forex rates ,etc. which may require information from other departments

This would also give the bank fairly of the internal customer service standards prevailing at its branches y y y Complete voucher checking and posting Sanction overdrafts Process consumer loans etc.

These are all time based determinants, it may also be possible for a bank to devise costbased determinants in some of the above cases. However , a cost based determinant is often highly dependent is often highly dependent on other factors like positioning of the bank, additionally it may inadvertently shift focus of the exercise. Corporate Banking Quantitative determinates could be, for example: y y y y y y y y Total time taken to process a loan application Time required t disburse a sanctioned facility Time between the taking of the decision and it being conveyed to the concerned party Number of questions/documents to be provided for a loan request to be processed Time taken by the customer to access the correct person t the branch Number of reference made by the Corporate office to the branch before an application can be processed Number of days taken at the Corporate Office t process a proposal Number of follow-up effort made to recover loans from defaulters

These could be compared and benchmarked against similar figures for competitors. Reliable data for competitor may be difficult to obtain data from customers who may be also banking with other banks. Others Quantitative determinants in other crucial areas could include: y y y y y Number of complaints received per period month, quarter,etc. Percentage of repeat complaints or complaints inadequately handled Percentage of complaints pertaining to attitude of employees Percentage of complaints pertaining to transaction processing time Percentage of complaints pertaining to excessive charges , etc.

y y y y y y y

Percentage of complaints pertaining to wrong debit entries etc. Percentage of ATM down time. Percentage of system down-time maintenance time, etc. Percentage of customer space to total space at the branches of the bank. Ratio of employee turnover at the bank to the industry average Average number of training person hours provided by the bank Average number and volume of exceptions reported per period

Customer Complaints Generally, it is found that customer complaints relate to one of the following areas: y y y y y y y Deposit accounts non-payment of interest, fraudulent withdrawal, transfer of funds, wrong debits, etc. Delay in collection of cheques, drafts, etc. Non-issuasnce of duplicate drafts, etc. Grievance relating to remittances Failure to honour, or , delay in honouring invoked LCs guarantees, etc. Delay in the sanctioning of loans and advances, charging of higher interest rates, etc. Miscellaneous complaints

As can be seen, most of the complaints relate to retail banking transactions. A bank could find it advantage to focus more attention on introducing quantitative determinants for retail banking areas. Monitoring Once determinants have been set and standards have been devised, continuous measurement should be made to monitor progress. Quality Control Charts can be used to ensure tracked regularly and any significant deviations are reported to top management, analyzed and rectified. Thus, suitable quantitative measures and policies should be designed to sustain continuous quality improvement in all area of functioning. Non-Quantitative Determinants A bank can also devise various non-quantitative determinants to help it improve its service quality. This is necessitated by the fact that objective and scientific measurement may not always be feasible or practicable .Non-quantitative determinants can also throw additional light on various facets of the banks service quality: some of the areas a bank can focus on include. Branch premises and Customer Lounges Is the branch easy to reach? Are the branch premises pleasing and comfortable ? Are the customer lounges well maintained ? Are there sufficient sofas for waiting customers? Is drinking water available to customers? Is there adequate reading material? Is the reading materials stock regularly updated? Is there sufficient variety of reading matter available? Does the reading matter conform to the reading tastes of the banks customers? Are the customer lounges being adequately used to highlight the banks achievements etc? Do customers look lost on entering the branch of is help readily available? Are the security personnel courteous and watchful ? ATM Is the ATM conveniently located? Is it easy to access? Is there adequate parking space available ? Are the ATM premises well maintained? Are writing material , deposit aenvolopes, etc. easily available? Is the security person polite and helpful? Is the ATM frequently not working on holidays etc? Are the ATM premises being suitable used for the banks publicity? Is the ATM easy to use? Is there help available to customers who may need it? Are the facilities offered at the ATM on per with the facilities offered by other

banks? Technology Has the bank adopted relevant technology best suited to its customers needs? Ate the staff members adequately trained t use the banks technology systems to better serve customers? Hoe does the bank compare with others in the industry? Does the bank continuously upgrade its IT systems? Is training available to employees who may need them? Is there a suitable Disaster Management system in place? Is the troubleshooting team equipped to handle minor problems? Publicity Are the banks press advertisements aligned to the needs of the target customers? Are the other publicity initiatives in keeping with the banks image and suited to the target client profile? Is the bank featured regularly in articles relating to banking ? Does the bank take interest in sponsoring socially relevant causes? Does the bank have an image of socially and environmentally conscious bank? Banks Staff Members Are senior officials available to customers who wish to meet them? Are the branch staff polite and courteous? Are they able to provide accurate information to customers? Do they have a strong customer focus? Do they their regular customers or do they appear grumpy and pre-occupied? Non-quantitative determinants are often difficult to standardize or benchmark. In some cases, however , internal guidelines to somewhat standardise ATM premises, branch primises, handling of customer complaints, questionnaires used to obtain feedback, etc. Many factors, like the customers, orientation of staff members may be difficult to evaluate and standardize recruiting policies and procedures to ensure that the right kind of people are selected. The bank could also experiment with various tests-psychological tests, studying behaviour in relation to group, etc. to help it select the right person. As the validity and efficient of these tests is often hotly debated the bank must use them with caution and after careful analysis. The bank should then evolve suitable training programmes to ensure that there is no effort lacking on the banks part in equipping the selected candidates to perform their duties satisfactorily. Non quantitative determinants are especially important because there is no way of knowing that the bank is going wrong. There will normally be no complaints relating to these factors, except if the staff has been extremely callous or rude. The effect of these factors on the customers perception of quality is also difficult to ascertain. Further , the divergence in customer perception (which are affected by several factors as discussed in an earlier section) is more pronounced for these non-quantitative determinants as compared to the quantitative determinants. It is therefore important for a bank to pay adequate attention and attempt to reasonably standardise these factors with the focus beign on providing timely and cost-effective quality banking services. Feedback from Customers To ensure that the needs of the customer are indeed what the bank perceives these needs as being the bank must continually seek and act upon feedback received from its customers. Quality and the Internal Customer Though we have been discussing everything with an external customer as the focus, I believe that, for total quality, internal customers are equally important. Internal customers are those in a bank who may be from another department branch. The principles that apply for external customers apply for internal customers as well. In fact , unless standards of service are established and implemented for internal customers, it will be almost impossible for a bank to implement any quality programme. Department and branches go to make the whole bank and unless there is smooth functioning in the system , it cannot deliver. For example , if a loan proposal is to be processed at a banks branch,

but the proposal is not processed quickly at the Corporate Office, the branch may not be able to give the customer what he has been promised . There must be total commitment from each and every employee for the quality programme to succeed. A chain is only as strong as its weaker link. The quality programme can only work if each employee the link in the organizational chain-is totally committed to developing a quality Services Bank. Quality By Design: Formulating Suitable Standard Once the measurement monitoring system have stabilised , it is important to ensure that there are appropriate standards for each of the relevant parameters which are monitored on a regular basis. Devising on a regular basis . Devisign quality standards will help ensure that Quality is a planned goal. Some guidelines that could be used to devise suitable standards are: Guidelines that could help a bank devise appropriate standards y y y y y y y y y y y y y y y y y y y Ensure that the branch premises are comfortable and pleasing Ensure that font-line staff is knowledgeable and can adequately handle customer queries Train staff to be courteous and polite Ensure that customers are treated as individuals and are given utmost priorityespecialoly over routine work that staff may have. Ensure that staff is trained to handle all companies in a non- confrontationalist manner Encourage front-line staff, who are directly dealing with customers, to suggest various quality improvement measures Ensure that ATM sites are well maintained Ensure that ATM are working at all items Ensure that a helpline is available from the ATM centre Ensure that deposit envelopes and writing materials are available at the ATM center Ensure that feedback is regularly sought from customers and acted upon suitably Let the customers know at one time what documentation is required to process loans Let the customer know at one time what documentation is required to process loans Ensure that all letters of credit, guaramtees, etc. are issued on time Explain all rates , terms and condition , etc. in simple terms, especially in the case of retail loans Address all quires promptly Ensure that names of senior executives are known to customers who may want to write to them Attempt to ensure transparent procedures within the organisation itself. Ensure that all systems and procedures are scrupulously adhered to and all deviations are promptly brought to the notice of the top management.

Quality Award A logical progression for a bank that has a service quality approach to business is to get an ISO 9001/2 certification. ISO 9001/2 siginifies continued commitment to quality. A bank wishing to get ISO 9001/2 certification would have to document all systems procedures in details. This requires time, effort and commitment. All Functional heads and Branch heads at the bank must be convinced of the need benefit of an ISO 9000 series certification. Banks can also compete for various Quality Awards . Even if a bank does not win, this can

help the bank measure where it stands and how far it needs to go. Quality awards encourage excellence and foster a competitive spirit. In the USA, the Baldrige Award for Quality ,given for manufacturing , services and small business ,is highly coveted. The would be winners are adjudged on the overall quality of their work. Various categories like leadership, information and analysis, strategies quality assurance , quality results and customer satisfaction ,are used to grade competitors. Each category has a certain weigh, the highest weight being accord to customer satisfaction. In, India, too, we now have the Golden Peacock Quality Award, which has been established by the Institute of Directors, I am sure that this award will go a long way in raising quality consciousness in India and will promote excellence in industry Quality Assurance Banks must strive to assure quality, that is , be able to affirm with adequate certainty that their products and services will satisfy given requirements of quality. Banks cannot be content with Quality Control. They must go beyond that and should strive to strive to give Quality Assurance. Some banks in India have experimented with service guarantees on deposit products, etc., but these have met with only moderate success. Quality awareness is now on the rise, and in the future we may see more and more attention being paid to assuring quality in banking products and services. The SBI has already taken a progressive step by formulating certain customer bills of rights, etc. and increasingly focus organization. Organisational Structure and the Learning Organistion Another factor that can contribute to a Banks success is a flat organisational structure and its policy of encountering discussions and suggestions . People in the front line are most often aware of quality needs of customers and can offer valuable suggestions. Banks should actively encourage all level of staff to contribute actively towards building a learning bank. Employee Empowerment A banks employees are inherent part of the service provided by the bank. It is not enough that they be trained to proved quality service, that they know what to do and how to do it. It is also essential that they have the requisite authority to do what it takes to satisfy, customers, and a corresponding responsibility towards ensuring customer satisfaction. Top management may be totally committed to providing total quality service, but ultimate it is the employees who will actually interact with customers and provide them with the various banking services on an on-going basis. It is therefore essential that y y y the employees be committed to providing total quality service employees be suitable trained and motivated and employees be empowered to deliver quality service to customers.

To do this, the bank must first ensure that it recruits people who are suited to providing quality customer service. They must have good team skill and a strong customer service and this should be a part of the banks culture. They must be given authority, commensurate with their experience , to deal with their customers in the way they consider most beneficial to the bank. This will also encourage employees to identify common customer problems and find new ways of dealing with the situation in the best possible way. Though employee empowerment is necessary , by itself it can only work to a somewhat limited extent in the banking Industry. Employee empowerment has been used with great success in other service industries, for example , the hotel industry, where waiters may be given the authority to waive the bill /check, provide a complimentary dish , etc. to placate a dissatisfied dinner. However , due to the financial nature of the transactions involved and the necessarily regulated structure of the banking industry, employee empowerment

can , by itself, only contribute marginally towards proving quality banking services. Though financial decision making has to be organized along structured lines for most levels of a banks employees, non-financial empowerment can help to provide job enrichment and motivate employees to give their best. For example , a Group of employees who individually handle a product, say, issuance of drafts, cheques, etc. may be given the group responsibility of handling the product n totality. From each person having individual responsibility towards a part of the task, the whole Group has the total responsibility of delivering the product to the satisfaction of the customer. Along with the responsibility , the Group , which may have a Group leader , has the power to sanction leave to group members, permit flexitime schedules to employees who may want to avail of it and permit inerchangeability of roles within the groups members are able to see the totality of their efforts and the totality of the products they offer. They can see their collective efforts fructifying into customer satisfaction. Since they can see what they are Delivering , how they are delivering it and to what extent the customer is satisfied as a result of their efforts, they can also recognise shortcomings and directly improve their services without the need for external supervision. This result in several benefits to the employees and the bank job content is improved , the job is broadened and thereby enriched . Employees sense of self-worth improves , their sense of belonging to the bank improves and they are motivated to deliver quality service. Working in a group also helps them to develop better team skills and learn to shoulder collective responsibility if the group grants leave to an employee, the remaining members would have to take up the work load of that member. In the process, the employees, also see how their individual contributions matter, how their fragmented jobs add up to a whole product and how their best efforts can really make a difference. Thus, employee empowerment can be amongst the best motivation rather than an external one and can help the employees want to deliver quality banking services to their customers. Employee empowerment is a necessary but not a sufficient condition for providing q uality banking services. A bank must, however , ensure that this does not hamper its employees from delivering quality service. Empowered employees will take pride in their work and will suggest solution to difficulties necessary for a bank to equal the performance standards set by the selected leader. A bank may for example, decide that it wishes to improve its process upto a certain pre-determined point, based on its own plans, or it may decide to improve in steps. Communication The Banks top management must communicate its goals to all levels of employees and should ensure that all employees are convinced about both managements commitment and the need to work towards the achievement to these goals. A bank may also introduce a system of points which employees would earn the achievement of specific sub-goals. A cross- functional benchmarking team should be identified early on. to ensure that the desired goals are achieved. Monitoring The Bank must then implement the benchmarking programme under the guidance of the crossfuntional benchmarking team. It must monitor progress, calibrate performance and ensure that it is as per the plans formulated by the bank. Universal difficult encountered by banks is the problem of objective measurement. As outlined earlier, there are no easy solutions. Each bank must find its own best-path towards achieving its chosen goals. Benchmarking is relatively new to the Indian banking industry, but , in the coming years benchmarking will grow in importance and scope and banks will be able to derive significant benefits through the use of benchmarking. We now have an India Benchmarking Centre (IBC) the first of its kind kin the world. Many banks committed to providing quality services , are now members of the IBC.

The Future As competition increases, quality will become the only true differentiator . Successful banks will be those that compete on quality . We must realise that competing on price means we are dependent on what the competition is doing for our success. Competing on quality means staying ahead of the competition. Banks that wish to surge ahead successfully into the new millenium would need to ingrain a Quality Culture. Every aspect of the banks functioning would have to be governed by the quality principles. As we head into the new millennium , technology will be the backbone of many aspects of our lives. In India , also , most of the banks with their sate-of the art technology have been able to provide superior service. ATMs help customers reach the bank even after closing hours. In the future , too , banks that wish to provide quality service will have to make investments in technology . Technology can help banks deliver superior service and provide better Management Information Systems and Decision Support Systems. Technology can help banks better analyze and manage various risks, and this will become increasingly important in tomorrows global market. A recent study conducted by Booz Allen & Hamilton indicates that there are at present , over 500 corporate banking website on the World Wide Web . These are forecast to rise to over 3000 website by the year 2000 AD. The survey also indicates that retail bankers in Asia-Pacific and Japan see the Internet as an expansion of the their upgraded ATM and Telephone Banking facilities. In the US, banks are focussing on using the internet to replace payment based products while in Europe they are focussing on adding information/ advice. In the future , the Internet is likely to become an important instrument for the banking industry, though security considerations will largely determine its usage. Another important aspect of banking will be a banks ability to create needs. With the onward march of technology, a quality driven bank can create a product whose need was hitherto not known . For example . Anywhere Banking , simply means that a customer may have an account in Mumbai but can transact business from any of the banks branches across the country . In this case, the customer is a customer of the Bank and not merely of a particular branch of the Bank. This pioneering service, Anywhere Bnking , has now become almost a necessity for companies across the length and breadth of the country. This is true innovation and will be the hallmark of the banks that will lead. Therefore, all the banks remains committed to providing technology-backed quality service to its customers and in building a service quality approach to banking. Contributed by Ashis K Sen Formar Managing Director Centurian Bank Limited Top

Banking Services - Quality

Innovation in banking in rural market K. V. Kamath, CEO of India's second largest banking and financial services conglomerate, ICICI, is a man in a hurry. When he occupied the driver's seat at ICICI more than a decade ago, it was a financial institution hamstrung by political constraints. Kamath was a key member of the top team at ICICI, including chairman Narayanan Vaghul, that led the organization into new businesses such as insurance and banking. Kamath, who spent his early years with the Asian Development Bank in Manila, used technology effectively, including online banking, to pry open market expansion. Today, his top challenge is to retain the talent ICICI trains, which is keenly sought by other financial services players. In an interview with Michael Useem, Wharton professor of management and director of the school's Center for Leadership & Change Management, Kamath discusses ICICI's foray into rural banking and other challenges.